Türkiye's central bank is expected to keep its key interest rate steady at 45% at its monetary policy meeting scheduled next week, according to recent surveys.
The monetary policy committee meeting on Feb. 22 comes after Fatih Karahan was appointed central bank governor on Feb. 3 after the resignation of Hafize Gaye Erkan.
The Central Bank of the Republic of Türkiye (CBRT) last month delivered a 250 basis-point hike, widely correlating with analysts' expectations, and signaling it concluded the tightening drive.
After its latest hike, the bank said it had achieved the policy setting needed to establish disinflation and this rate level would be maintained until there is a significant decline in the underlying trend of monthly inflation.
Since last June, after President Recep Tayyip Erdoğan named new economic administration, the central bank has lifted its key rate by 3,650 basis points.
All 11 economists surveyed by Reuters expect the policy rate would be kept steady this month.
Presenting the quarterly inflation report earlier this month, Karahan said the bank would maintain a tight policy stance until inflation drops to target, keeping a year-end inflation forecast of 36%.
He said another rate hike was not currently needed but it was too early to talk about easing, damping expectations of a quick easing cycle and reinforcing analysts' views that he would remain hawkish until inflation begins to cool around midyear.
According to the median forecast of the Reuters poll, the policy rate is expected to be 37.5% at end-2024. Only one of the 10 institutions who responded to the query expected the policy rate to remain at 45% at the end of the year, with the estimates in the 35%-45% range.
Türkiye's inflation hovered nearly 65% last month and is expected to peak by midyear before entering a down trend.
A survey by Anadolu Agency (AA) also predicted the CBRT would keep the key policy rate at the current level.
According to the survey results, all 14 economists participating in the survey expect the policy rate to remain at 45%, while the poll's median forecast sees the year-end policy rate at 36.25%.
Karahan, previously deputy governor and a former Federal Reserve Bank of New York economist played a significant role in the tightening cycle since last June.
The bank will announce its rate decision at 14.00 local time, 11 a.m. GMT on Feb. 22.
